Apple’s and AT&T’s original iPhone deal confirmed to run through 2012; Is it still in effect?

invisibleSHIELD case for iPad“An ongoing California class-action lawsuit filed in 2007 claims that Apple and AT&T illegally exerted a monopoly over iPhone service by telling customers the iPhone’s required service contract was two years long when the Apple / AT&T exclusivity deal was actually for five years — thus requiring buyers to re-up with AT&T for three years (and not, say, T-Mobile) if they wanted to keep using the iPhone,” Nilay Patel reports for Engadget.

“Obviously Apple had to respond to these allegations, and in addition to arguing that no one was ever promised an unlocked iPhone after two years, the company’s lawyers repeatedly confirm the existence of the five-year agreement while noting it was publicly reported in USA Today,” Patel reports. “It’s extremely black and white…”

Patel reports, “Now, this all went down in October of 2008, and while it’s sort of amazing we hadn’t seen it earlier, the real question is whether or not the exclusivity deal is still on the books. Contracts can be canceled, amended, and breached in many ways, and AT&T’s spotty recent service history plus the explosion of the iPhone and the mobile market in general have given Apple any number of reasons to revisit the deal.”

Full article here.

[Thanks to MacDailyNews Reader “Scarboro” for the heads up.]

18 Comments

  1. “Patel reports, “Now, this all went down in October of 2008, and while it’s sort of amazing we hadn’t seen it earlier,”

    Excuse me!?!?! I read it here at MDN a couple years ago. Someone was snoozing…

  2. One opportunity to have modified the 5 year period occurred when apple/att changed terms on introduction of iPhone 3G in 2008. That’s when ATT first started subsidizing the purchase price of the phone (by paying Apple roughly $400 per phone over retail). Prior to that, ATT was “subsidizing” the plan price by reducing charges to iPhone owners $10 monthly.

  3. But but but, all of those analysts that say a Verizon iPhone is coming out each quarter can’t be wrong ” width=”19″ height=”19″ alt=”smile” style=”border:0;” />

  4. I rather like my iPhone 2G and its original contract – I’m now on a month to month basis – still with my original $20/mo unlimited data plan. Sure, its just 2g but it works everywhere and saves me ~$180/yr!

  5. The law suit is insanely stupid.
    Are any 1st generation iPhone users here still using the 1st iPhone and have a contractual obligation? Do you not just go to a “monthly contract” like with any other cell phone when you are finished with your two year obligation?

  6. Same here, Revscott! I’m perfectly happy with gen1 iPhone and I like the savings. Since it won’t be upgradeable to OS 4, I’m toying with the idea of jail breaking it and tethering it to my Wifi-only iPad.

  7. My iPhone 3GS is my first iPhone, as my wife had to have the first iPhone in the family (it was the original, 1st gen iPhone, but she did trade up to the 2nd gen iPhone). While there are some areas around here where AT&T;service drops out, the same is true of Verizon, and we always had nothing but trouble with Verizon customer service before getting the iPhone. I don’t think we’re going to have any trouble maintaining our service with AT&T;at the expiration of our contract.

    Even with the 5-yr exclusivity agreement, I don’t see this lawsuit as anything more than scumbag lawyers in a feeding frenzy over words. I don’t think the 5-yr exclusivity agreement between Apple and AT&T;has anything to do with a 2-yr contract for services between an individual and AT&T;. The outcome of this lawsuit is a foregone conclusion.

  8. I am at risk for serious brain damage. I cannot stop banging my head against the wall. Every time I try and comprehend what the lawyers are trying to argue, I have to bang my head harder against the wall. Just the fact that the courts have let this get this far makes me want to gouge my eyes out and puncture my ear drums. There’s not much left of me. Please, the insanity must stop!!!

  9. My 3G iPhone is also on a $20 EDGE data plan, as I didn’t have 3G within 100 miles of me when I got my iPhone. Of course, when I’m in a 3G area, it runs over 3G. Now, I’m only 10 miles away from a 3G area.

  10. I found a link to the original USA Today that started the claim that there was a 5-year agreement. What I recall since then was that ATT claimed the 5-year thing was “taken out of context” and since then, neither Apple nor ATT have confirmed what the deal really was. Since then, on the 3G and 3Gs releases, the contract was “extended” for the next year according to various press reports who had reliable info from inside.

    So… one of these two things may have happened: the original contract is no longer technically in effect (perhaps thanks to this lawsuit), but they are “renewing” it each year with a wink and a nod; or… Apple/ATT have both blowing smoke up our asses with these “leaks” to the press that the contract was renewed for another year each time, to throw everyone off from confirming what the real contract period is.

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